Now more than one in three owned homes are not primary residences. And bulls want us to believe that housing is hot due to supply constraints � LOL! Sure, housing is still relatively hot, but rents are very soft. Most longs don�t understand how a feeble rental market will eventually undermine home sales, and force home values down in much of the country. The long overdue cycle has not completely matured yet, but it will.
Another problem longs have is real incomes are not rising. Rising household incomes have a lot to do with home value appreciation and sales � this fact was proven in the seventies and eighties when many mothers were forced to abandon their homemaker duties to seek employment and increase household incomes. Despite rising rates, home values remained strong � this was due to rising household incomes.
Another problem longs have is the homeowner ATM is closing for business. Many would be foreclosures were avoided (or deferred) during the last 5 year bull market. Those homeowners that were financially irresponsible or suffered a job loss, etc � were able to seek much needed capital by refinancing and extracting perceived home equity. This is the primary reason why Americans are now spending more than they save � and I would bet that if there�s anything that keeps Alan Greenspan up it�s this issue. Eventually these postponed foreclosures will come to market, forcing prices down and making banks rethink their extremely liberal lending tendencies.
Hythere, nice to see that you are still short this sector. Great contrary indicator, along with so many of your fellow shorts. So where do you see these stocks headed now? What's your price target and time frame? Do you still see DHI going down to $9/share? Oh wait, I guess that would be $6.75/share now, adjusted for the recent split. Thanks in advance for your current targets.